Powerchip flogs all DRAM output to Elpida

Powerchip Technology has been whispering to Elpida, agreeing to sell all its DRAM output to the chipmaker.

In a statement Powerchip said the agreement means its licensing and technology transfer fees will be significantly reduced. It added that it will use its new found freedom to acquire Mobile DRAM technology from Elpida.

Elpida, it seems, will also be instrumental to helping Powerchip along its merry DRAM mobile chip way, teaching the company the ins and outs and how to make DRAM chips for mobile devices.

Of course Elpida is getting its share too, with the agreement indicating that in the future Powerchip manufactured DRAM products, as well as Powerchip’s rights to the portion of Rexchip’s output, will be completely sold back to Elpida.

It added that it will suspend current relationships with other “sales agents and in coordination with Elpida support Powerchip’s current commodity DRAM customers.”

“The new business model will help stabilise the company’s DRAM business, which will not be as -volatile as it used to be, and could lead to a stable cash flow and bottom line for the company in the long run,” Powerchip said in a statement after the board approved the renewal of an agreement with Elpida.

The new agreement will help the company save a large amount in royalties payments and cut outlay for technology transfer, it said.

Over at Elpida, it has announced it will begin a full-scale mass production of 30nm process DRAM next month, which it claims will help with “the increasing need for low-power products in today’s rapidly expanding mobile device and cloud computing markets”.

Elpida completed development of advanced 30nm process DRAM in September 2010 and started shipping 2-gigabit samples to major customers including the processor makers in December.

Since then it’s begun to increase production and will now begin the mass production at its Hiroshima Plant.

30nm 2-gigabit DDR3 SDRAM for PC applications will start in May 2011, followed by 4-gigabit DDR2 Mobile RAMTM and 4-gigabit DDR3 SDRAM.

It looks like staff at the company’s Hiroshima Plant will be busy bees, with 20 percent of production capacity being put to manufacturing the new 30nm process. 

This will be ramped up to 30 percent in the third quarter as the company implements its planned switchover of almost all production lines to cost-effective 30nm and 40nm processes.